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Should folks pay closer attention to networking connections and insider selling at Freeport-McMoRan Copper & Gold (NYSE:FCX), McMoRan Exploration (NYSE:MMR) and Plains Exploration & Production Company (NYSE:PXP)? Perhaps they should. I like to look at ‘signals’ that are provided from insider transactions and networking relationships. I’m not claiming that anything here is illegal, but I strongly believe that people should pay closer attention to this stuff.

However, it is intriguing to note the overlap and intertwined relationships of the three companies' boards. In fact, there are 22 separate relationships between the boards of Plains and Freeport alone. As stated, the overlap of McMoRan and Freeport's boards is expected but this relationship raises questions as to the merits of the acquisitions. Nevertheless, there are 20 cases of board members from all three companies being intertwined through the boards.

One case of overlaps that stands out actually brings into question the University of Texas at Austin. Charles Groat, Professor of Geosciences at the University, is an Independent Director of Plains Exploration. This is interesting because B. M. Rankin Jr., Vice Chairman of Freeport, is the Director of the McCombs Business School at none other than the University of Texas at Austin.

Courtesy of FactSet, here's the relationship at Texas that Kanterman noted:

Connections at Texas -- data courtesy of FactSet

In a statement by the University of Texas to Kanterman, they noted that Rankin was NOT a director:

The university accepted Dr. Groat's retirement last month. Additionally, Mr. Rankin not on faculty or staff at UT and there is no position of "Director" at the McCombs School. Mr. Rankin (along with Freeport's chairman James R. Moffett) is an alumnus and supporter of the McCombs school and has served on various UT advisory committees but is not a UT employee.

Richard Adkerson is the CEO of FCX. Although the University of Texas stated that Rankin was not a director, according to Adkerson's biography in FactSet, the CEO of FCX is a director:

He is on the Board of Directors at Freeport-McMoRan Copper & Gold, Inc., PT Freeport Indonesia, International Copper Association Ltd., The International Council on Mining & Metals, Business Council of New Orleans & the River Region, The New Orleans Police & Justice Foundation, Inc., New Orleans Baptist Theological Seminary Foundation, Greater Phoenix Leadership, Inc., Greater Phoenix Economic Council, Arizona Commerce Authority, and The University of Texas M.D. Anderson Cancer Center.

And, according to FactSet (link goes to MarketWatch at the WSJ, FactSet info), Rankin was a director as well:

Mr. B. M. Rankin, Jr., is a Director-McCombs School of Business at University of Texas, Vice Chairman at McMoRan Exploration Co., and Vice Chairman at Freeport-McMoRan Copper & Gold, Inc.

So, even if Rankin was not a director, Rankin and Adkerson still had strong connections to the University of Texas. Perhaps, Texas should contact FactSet and correct FactSet's database? The statement by Texas actually reinforced the idea that Rankin was well connected to the University. If Texas was trying to create some distance from the deal, their statement actually strengthened the connection. As a result of their ‘clarification’ and ‘defensive’ position, I had to look into the connections a bit more. In particular, I was curious to know how many connections existed between MMR and the University of Texas. According to Factset, it’s not just Rankin that is connected to the university; there are other connections as well. Needless to say, even though Rankin may not have the title of ‘Director’, there exist other strong connections between MMR, PXP, FCX and the University of Texas. Here's a sampling...